Capital CFDs Puts Client Money Protection As a Top Priority as ASIC Review the CFD & Forex Industry

June 1, 2012 - PRLog -- ASIC surveillance after MF Global’s collapse has revealed a great concern within the OTC derivatives industry in that more than 30% of providers have failed to comply with client money laws.

"After MF Global’s collapse it is disheartening to read that there are a large proportion of providers who are not complying with the most important procedure in running a company, the protection of client money,” said Andrew Merry, Managing Director, Capital CFDs http://www.capitalcfds.com.au

Section 981D of the Corporations Act states that client money held by OTC derivative licensee can be used for the purpose of meeting obligations in connection with margining, guaranteeing, securing, transferring, adjusting or settling dealings in derivatives by the licensee (including dealings on behalf of people other than the client).

“When Capital CFDs came to Australia, we were stunned to find out that the Corporations Act allowed operators to use client funds to finance operational costs, which is clearly not in the interest of the client. We brought with us the UK practice of quarantining client monies and not using it for any operational purposes at all, including the hedging of client positions. I believe we are getting closer to having this standard applied across the industry with Treasury considering a change to the law,” said Andrew Merry, Managing Director, Capital CFDs.

A group of key providers, comprising of Capital CFDs, CMC markets, GFT, IG Markets and Saxo formed the Australian CFD Forum earlier this year to formulate a number of Standards to follow, one of which is the full segregation of client money.

For more information about Capital CFDs and information about their internal client money rules, please visit http://www.capitalcfds.com.au

Capital CFDs is a trading name of London Capital Group Pty Limited and is fully owned by London Capital Group Holdings Plc which is listed on the London Stock Exchange. London Capital Group transacts over 30,000 trades each day and has over 70,000 clients globally. Capital CFDs is regulated by ASIC under AFSL 364264

While Capital CFDs attempts to ensure that the information herein is accurate at the date the information was produced, however, Capital CFDs does not guarantee the accuracy, timeliness, completeness, performance or fitness for a particular purpose of any of the information provided herein and under no circumstances are they to be considered an offer, solicitation to invest or be construed as giving investment advice.